Repeal of UBTI for Parking Benefits for Tax-Exempt Organizations
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The Tax Cuts and Jobs Act (TCJA), signed into law at the end of 2017, made tax changes to qualified transportation plans.
As previously reported, tax-exempt organizations that sponsored commuter benefits, such as employer-paid parking and transit passes, were required to increase their unrelated business taxable income (UBTI) by amounts paid or incurred for qualified transportation fringe benefits provided to employees.
However, at the end of 2019, the Further Consolidated Appropriations Act, 2020, repeals this provision. The repeal is effective retroactive to the date of its enactment, December 22, 2017. Any organization that incurred UBTI as a result of the provision should file an amended Form 990-T to seek a refund for any taxes paid. Instruction on how to apply for such refunds can be found on the Internal Revenue Service’s website. Organizations will want to consult with their tax advisors as to whether a state tax refund is available as well.
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